Towards Coordination of Decentralized Embedded System Development Processes

Summary An acceleration in technological change and shorter product life cycles lead among other things to companies‘ concentration on their core competencies and to a parallelization of formerly sequential processes. This results in an increasing number of collaborations between firms. This trend can also be observed in research and development, where projects are often conducted corporately by various partners. An example for such a cooperation is the development of embedded systems. Embedded systems are characterized by a modular design of different interacting hard- and software components. Thereby, the performance of the overall system depends on the interaction of the individual components‘ performances. In current system industry‘s practice, these components are developed by specialized suppliers and are then combined to the embedded system by a system integrator. Since these partners are usually legally and economically independent companies, the cooperation is regularized by contractual agreements. In practice, fixed-price contracts are most commonly used. In these contracts, components‘ requirements as well as prices are fixed ex-ante by the system integrator. However, uncertainties exist with regard to the outcome of the development process. For instance, the performance of components as well as of the overall system cannot be predicted with certainty. Additionally, partners may follow different objectives. Thus, ineficiencies in the design process as well as in the design of the embedded systems often occur. Some of these uncertainties and ineficiencies might be absorbed by making use of existing substitutional dependencies between components. However, this is not possible when inappropriate contracts as well as insufficient incentive structures are applied, since these lead to a decreasing exibility in the development process and thus to an increase in development costs. Thereby, economic risk for suppliers and integrators increases. Overcoming these difficulties requires improved coordination of the partners ahead of and during the development process. Hence, the aim of this contribution is to improve collaborative development processes of embedded systems by adapting mechanisms from supply chain management to development processes. As in supply chain management cooperation is regularized by contracts. In addition, uncertainties exist in the decentralized development processes as in supply chain management, which lead to ineficiencies in the cooperation. Supply chain management has rich experience in exible contracting with various incentives, targeting overall exibilization, risk mitigation, and economic fairness [1]. Unlike in supply chain management there are substitutional dependencies between components‘ attributes in the development process. However, differences between production and development processes currently prevent an easy adoption of these mechanisms. First approaches to the exibilization of contracts in embedded system development processes are given by [2, 3]. In the following section a mathematical model for cooperative development processes is described and analyzed with regard to the optimal actions of the partners.